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Here are the prices for bonds paying annual coupons and having a par value of $100. Matruity (term) Annual coupon price per $100 of par

Here are the prices for bonds paying annual coupons and having a par value of $100.

Matruity (term) Annual coupon price per $100 of par
1 10% 106.7961
2 2% 94.4588
3 8% 100.7571

(a) Using the bootstrap method, find the one, two and three year spot rates implied by these prices. (b) Find the price of a three year bond with annual coupons of 12% and $100 par value.

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